Netflix announced it will expand its sharing program — which could be bad news for those using the same account in different households — to the U.S. in the second quarter of 2023 after piloting it in four countries.
“In Q1, we launched paid sharing in four countries and are pleased with the results,” Netflix wrote in a letter to its shareholders, per Variety. “We are planning on a broad rollout, including in the U.S., in Q2.”
Paid sharing, which Netflix has been teasing for months now, would prevent people from using the same Netflix account in different households. Instead, users will have to pay to add an additional profile to their Netflix account or will have to open a separate account altogether.
As Variety reports, the streaming platform debuted the program in Canada, Portugal, Spain, and New Zealand in Q1 of 2023, where Netflix launched a “buy an extra member” option for subscribers that allowed account holders to pay additional monthly fees for users who do not live in their household.
The company also plans to block devices from accessing a Netflix account if they haven’t paid after a certain time.
“This will not be a universally popular move,” co-CEO Greg Peters admitted on an earnings call in January, per Variety.
While this could lead to higher cancelations, the company still reports increased revenue.
“As with Latin America, we see a cancel reaction in each market when we announce [paid sharing plans], which impacts near-term member growth,” Netflix said, per Variety. “But as borrowers start to activate their own accounts and existing members add ‘extra member’ accounts, we see increased acquisition and revenue.”
Canada’s paid membership base is now larger than prior to the plan’s launch, boding well for Netflix how the plan will play out in the U.S.
Netflix said launching this plan in Q2 allowed the company to implement changes, such as allowing members to use Netflix outside of the country, and transferring profiles to separate accounts.
“While this will shift some of the membership growth and revenue benefit from Q2 to Q3, we believe it will result in a better outcome for our members and our business,” Netflix said. “Longer term, paid sharing will ensure a bigger revenue base from which we can grow as we improve our service.”
In its January earnings letter, Netflix estimated that over 100 million households were sharing accounts.
“Today’s widespread account sharing (100M+ households) undermines our long term ability to invest in and improve Netflix, as well as build our business,” Netflix said. “While our terms of use limit use of Netflix to a household, we recognize this is a change for members who share their account more broadly.”